1989 (5) TMI 182 - AT - Central Excise

Summary

Issues:
- Classification of pre-budget stocks for duty clearance under Central Excise Tariff Act
- Interpretation of excisability of goods under Tariff Item No. 1902.10
- Application of Rule 9A of Central Excises and Salt Act for duty collection

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved a dispute regarding the classification of pre-budget stocks for duty clearance under the Central Excise Tariff Act. The appellants, manufacturers of various food products falling under Tariff Item No. 1902.10, claimed that their pre-budget stocks of non-excisable goods were entitled to duty-free clearance. The Assistant Collector, however, concluded that the products were excisable though exempted from duty, leading to the present appeal.

The learned Counsel for the appellants argued that the goods were not leviable to duty under Heading 1902.10 until a specific date and were made dutiable only by the Finance Bill of 1987-88. He contended that the pre-budget stocks were fully manufactured before the duty imposition date and should be allowed duty-free clearance. The appellants had filed their Classification List showing the pre-budget stocks for approval, but the authorities rejected their claim based on the excisability of the goods.

In response, the learned SDR for the respondents argued that the pre-budget stocks were excisable goods, and duty could be collected at a later date for administrative convenience. Reference was made to Rule 9A of the Central Excises and Salt Act, which links duty payment to the date of removal of excisable goods from the manufactory. The SDR cited previous judgments and the scheme of the Act to support the position that excisable goods remain subject to duty even if fully exempted.

The Tribunal considered conflicting views from various High Courts on the issue. It noted that the moment an excisable article is manufactured, the duty liability is fixed, and duty can be levied at the time of removal as per Rule 9A. Citing precedent cases and recent Tribunal judgments, the Tribunal affirmed that excisable goods do not lose their excisability even if fully exempted from duty. Consequently, the appeal was dismissed, and the appellants' claim for duty-free clearance of pre-budget stocks was rejected.

In conclusion, the Tribunal upheld the excisability of the goods in question and affirmed the application of Rule 9A for duty collection, dismissing the appeal against the impugned order-in-appeal.